Senate GOP: No new taxes — really; forecast predictions

WHAT’S HAPPENING TODAY

EVENTS FRIDAY

7:30 – 9:00 a.m.:  Minnesota Chamber of Commerce Insider’s Breakfast: Energy and Environment Regulations. Saint Paul Hotel, 350 Market St., St. Paul.

WHAT HAPPENED YESTERDAY

REALLY, NO NEW TAXES: The entire Senate Republican caucus took to a signed letter Thursday sent to Gov. Mark Dayton to reiterate what most of them campaigned on: Don’t raise taxes to fix the state’s budget gap. “We are all opposed to raising taxes,” they wrote. DFL Caucus Leader Tom Bakk fired back a missive of his own, and questioned whether Republicans, by indicating no room for compromise with the governor, were prepared to force “an expensive special session, or a shutdown of state government.” He also questioned whether the GOP was opposed to any tax reform that might have the effect of raising total state revenues — such as a broadening of the sales tax at a lowered rate.

ORTMAN: The letter comes after a few days’ worth of news reports and speculation about some willingness to raise taxes within the GOP Senate caucus — whether it be by broadening sales taxes, eliminating tax breaks, or other means. Taxes Chair Julianne Ortman was at the center of the speculation after she made comments calling tax expenditures government spending. Ortman has told us in the past that she fully intends to review and eliminate some tax breaks, although she disavowed any express wish to raise total revenues. She also mused favorably about how some states have been able to broaden sales taxes and lower rates.

In turn, it seems GOP communications staff kept Ortman under wraps most all day Thursday. After her Taxes hearing Thursday morning, the head of communications for the caucus, Michael Brodkorb, was seen waiting in the wings with another communications staffer to lead Ortman away. In response to a question directed at Ortman, Brodkorb simply replied: “No comment today.”

PROPERTY TAX BILL:  Local sheriffs and county attorneys were able to shoot down a portion of a property tax freeze bill heard in the Property and Local Tax Division. At issue to the legal and law enforcement lobbyists: A provision in the bill would take away the right of sheriffs to appeal the budget allocated to them by county boards to district court under certain conditions. Positioning the issue as a threat to public safety, DFL Rep. Paul Marquart backed the local officials, and they were able to strip the provision from the bill.

HOUSE FLOOR: The full House passed three bills Thursday: a move to ban synthetic marijuana passed overwhelmingly (124-4), increased penalties for injuring a public safety dog passed 107-22 and an unemployment insurance extension and policy changes passed 126-3.

SENATE FLOOR: The Senate passed two bills Thursday: a bill to cut back environment review processes passed 49-16 and will head to conference committee. An omnibus lands bill passed 66-0.

REVENUE FORECAST BETS: We asked a dozen or so seasoned legislators and lobbyists for their predictions on next week’s budget forecast. The takeaway? Tempered optimism.  No one thought the forecast would reveal a larger deficit.  Though several cited former MMB chief and current lobbyist Tom Hanson’s predicted $500 million improvement for the next biennium, the majority were more conservative, putting the figure in the $100 million to $300 million range. The forecast will be presented by state economist Tom Stinson at 11:30 on Monday.

McMANSIONS TAX: PIM’s Paul Demko posted a fiscal analysis of Gov. Mark Dayton’s proposed tax hike on $1 million homes. According to the analysis, 9,150 properties would be affected by the change. Roughly three quarters are homesteaded properties and would see an average tax hike of $5,600. More than 80 percent of the targeted homes are in the Twin Cities area, with Southwest Hennepin County making up 3,680 of them.

IN THE FAST LANE: One environmental lobbyist wondered if the Legislature was moving too quickly on bills related to environmental permitting, noting that a legislative auditor’s report (due next Tuesday) was still forthcoming: “Why pay for a legislative auditor if you’re not going to wait for their opinion?”

TAX CONFORMITY: Gov. Mark Dayton sent a letter of his own Thursday, requesting that the Legislature act quickly on tax conformity — particularly for Tax Year 2010. The House Taxes Committee Thursday passed a conformity measure that’s now bound for Ways and Means, while the Senate continues to work on the issue. The GOP’s Phase One budget bill, which Dayton vetoed, included 2010 conformity. While conformity for the past year is a matter of bipartisan agreement, the question of the next two years — thanks to the extension of the Bush tax cuts, health reform law and other federal changes — is a much more expensive proposition. Some estimates put the cost as high at $500 million in total. House Taxes chair Greg Davids (pictured) has said he’s aiming for full conformity, although he concedes the question will be how to pay for it. Senate Taxes Chair Julianne Ortman, meanwhile, has said she’d like to see conformity as well. Not conforming would mean more revenue for the state, but could be portrayed as a tax on federal tax breaks — anathema to anti-tax Republicans.

NEW BILLS: A bill from Sen. Geoff Michel, David Hann and Sean Nienow would end the state’s participation in No Child Left Behind (SF 433). Sens. Julianne Ortman, Jeremy Miller and Gretchen Hoffman introduced SF 467, allowing local governments to impose sales taxes in some instances. See the full Senate introductions here.

House Taxes Chair Greg Davids introduced a bill (HF 649) Thursday that would allow local government to impose sales taxes in certain conditions. Rep. Kurt Bills’ HF 686 would reduce legislative pay if no budget is passed. HF 694, from DFLers Larry Hosch, Erin Murphy and Tom Huntley would make changes to state managed care contracts. See the full House introductions here.

TODAY’S CAPITOL SCHEDULE

HOUSE COMMITTEE HEARINGS

The Permanent School Fund Advisory Committee will hear an overview of school trust lands from the DNR and discuss the committee’s focus at 10 a.m. in Basement SOB.

The Redistricting Committee will hold a public hearing on its process at the Olmsted County Government Center at 11 a.m.

SENATE COMMITTEE HEARINGS

The Health and Human Services Committee will hear more from the governor’s Department of Health budget recommendations at 9:30 a.m. in 15 Capitol.

BILLS HEARD IN COMMITTEE WEDNESDAY

HOUSE

HF 191: Redundant Technology Elimination Act. Laid over by Government Operations and Elections for possible inclusion in omnibus bill.

HF 269: Teacher contract qualified economic offer. Passed as amended by Education Reform. Referred to Education Finance.

HF 451: A tax conformity bill. Passed as amended by Taxes. Referred to Ways and Means.

HF 481: Property tax freeze. Laid over in Property and Local Tax Division for possible inclusion in omnibus bill.

SENATE

SF 123: County grants for fair facilities preservation and improvement. Passed as amended by Agriculture and Rural Economies. Referred to Environment and Natural Resources.

SF 192: Livestock investment grants appropriation. Laid over in Agriculture and Rural Economies for possible inclusion in omnibus bill.

SF 397: Agricultural growth program appropriation. Laid over in Agriculture and Rural Economies for possible inclusion in omnibus bill.